OPEC+ extends oil production cuts through December

Shafaq News/ Eight OPEC+ countries announced, on Monday, that they will extend voluntary oil production cuts until the end of December.

The countries—namely Iraq, Russia, Saudi Arabia, the UAE, Kuwait, Kazakhstan, Algeria, and Oman—stated that they have "agreed to extend the additional voluntary production cut by 2.2 million bpd for one month."

This decision aims to prevent oversupply and support prices, as US West Texas Intermediate and Brent crude currently hover around $70 per barrel amid weak demand and increasing supply.

The Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, formed the OPEC+ alliance in 2016 in partnership with other oil-producing nations, including Russia, to counter challenges from US competition.

Currently, the alliance consists of 22 members who collectively cut production by about six million bpd. This includes both alliance-wide decisions and additional voluntary reductions.

OPEC+ ministers are scheduled to meet in early December in Vienna, OPEC’s headquarters. However, the recent announcement confirmed that the eight countries extending cuts will not reverse current production reductions before early 2025.

As a result, the phasing out of voluntary cuts will be delayed by at least three months from the previously planned timeline, set at the June ministerial meeting, when OPEC and its allies had expressed intentions to increase production starting in October.

At that time, OPEC+ had left room for adjustment, noting that this decision could be revisited as needed.

Global oil demand growth has slowed in recent months due to an economic slowdown in China, the world’s second-largest oil consumer, and the US, where attention is focused on the upcoming presidential elections on Tuesday.